Windfall beef sales to Japan tipped to fall

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Australia's domination of the export beef trade in Japan is
likely to end after weekend moves in Tokyo to allow renewed access
to United States producers.

Japan's ban on US beef, caused by an outbreak of mad cow disease
in American cattle last year, has been a windfall for the
Australian economy. It has doubled the volume and value of the
trade to about $2 billion and increased Australia's hold on the
market from about 48 per cent to about 95 per cent.

But that is set to change after three days of talks in Tokyo
ended with Japan agreeing to the re-entry of US beef.

The US chief negotiator, J. B. Penn, said that within a "matter
of weeks" American beef would be back on the menu in restaurants
and on dinner tables. Only one more hurdle remains - a positive
report from Japan's Food Safety Commission.

The decision comes as no surprise, according to the regional
manager of Meat and Livestock Australia, Samantha Jamieson. "We've
always seen the absence of the US as a temporary condition in this
market," she said.

The Cattle Council of Australia warned of the negative impact on
the cattle market but could not predict its extent.

"There's the possibility of a big impact with a battle for
market share," said council vice-president John Wyld.

Re-entry has come at a price for the US. American producers will
have to satisfy Japan that the beef it sends is aged 20 months or
less, a difficult condition to impose on ranchers and meat
processors dealing with thousands of head of cattle.

To regain Japan's confidence, the US has had to agree to a
temporary review of its beef industry to prove that it can verify
the age of its cattle, Mr Penn said. Over the age of 20 months,
when risk of the disease rises, all cattle would be tested at
Japan's insistence. The new rules will also apply to Japan's
domestic beef industry which has had more than a dozen cases of mad
cow disease, or bovine spongiform encephalopathy.

Australia, which is free of BSE and is listed by the European
Union as one of the world's lowest risk countries, is not required
to test beef.

Earlier this year Australia sought reassurance from Japan that
it would not be lumped in with US producers when new food safety
standards were drawn up, Ms Jamieson said.

The Food Safety Commission report, which could take up to four
months to complete, deals with scientific questions. Though
independent of the health and agriculture ministries, the
commission is not expected to buck the Government's desire to
re-open its US markets.

The commission has been directed to hold meetings in each of
Japan's 47 prefectures before it gives a final opinion about new
testing standards.

Concerns about BSE are acute among Japan's consumers and 25
prefectures have introduced blanket testing of all domestically
produced beef to help alleviate public fears. The tests are funded
by the Japanese Government, which has said that it will continue to
foot the bill for another three years.